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Caeser's Palace eyes Mall of America?

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Caesars ups its ante in bid for mall casino

Mark Brunswick, Star Tribune

April 20, 2004

The two-color flier recently began appearing in the mail in Bloomington, with a picture of a pair of dice and the headline: "Monopoly Is Fun ... When It's A Board Game." It complains that Minnesota is losing millions in tax revenue because of the state's Indian gaming monopoly.

The small print indicates the flier was prepared and paid for by the Minnesota Entertainment Development Corp. But the real money behind the literature has a better known name: Caesars Entertainment Inc.

That would be Caesars, as in $4.5 billion in annual net revenue, 29 properties in five countries on four continents, 29,000 hotel rooms, 2 million square feet of casino space and 54,000 employees.

The gaming industry behemoth is making a high-priced and high-profile push in Minnesota for a proposal to construct a casino near the Mall of America in Bloomington.

Caesars, which has since severed its ties with the small lobbying firm that produced the "monopoly" mailing, has hired a top-notch local lobbying firm with more legislative horsepower. It has conducted its own polling in Bloomington to determine how residents might feel about a casino in their back yard -- and how they feel about elected officials who might get in the way.

What had appeared to be a potential logjam of gambling proposals in the Legislature showed signs of a break-up in recent weeks when Senate Majority Leader Dean Johnson, DFL-Willmar, signalled that some members of his caucus were pushing for several gambling proposals to be heard.

While cautioning that gambling would not be part of any budget solution, Senate Taxes Committee Chairman Larry Pogemiller, DFL-Minneapolis, also said he would hold a massive hearing on all the gambling proposals within the next two weeks.

That slight opening has rejuvenated Caesars' effort for its Mall of America plan more than any of the other gambling proposals. The mall idea would require a constitutional amendment to be realized. Caesars has projected it would bring in at least $1.1 billion in total annual revenue and generate $213-$253 million a year in state gaming taxes alone.

Last week, corporate officials made the rounds at the State Capitol, in the process generating a whisper campaign in the corridors over who had seen "the Caesars people," with noticeable attention paid to the bling bling on their ring fingers and wrists. The group met with legislative leaders in the House and Senate and representatives from the governor's office.

The renewed effort comes as one of the year's gambling proposals faces a crucial committee vote today. The House Ways and Means Committee is scheduled to vote on a plan for the state to become a partner in a metro-area casino with two struggling northern Minnesota tribes. The plan would allow the two tribes, Red Lake and White Earth, to tap into the lucrative metro gaming market. In return, the state would get 20 percent of the gross revenues, an estimated $89 million a year.

While the prospects for a favorable vote in committee remain iffy, the tribes -- the largest Indian nations in the state but among the poorest -- have launched their own public relations effort, with a TV ad campaign designed to show that not all tribes have benefitted equally from Indian gaming.

Other gambling proposals remain on the table. One bill in the Senate would allow the Canterbury Park horse racing track in Shakopee to install slot machines, known as a "racino." The House already has passed such a measure. Another bill would allow a card room at a proposed harness racing track in Anoka County.

But by far the most vigorous push behind any gambling proposal now is coming from Caesars. The Caesars proposal would generate the most revenue for the state.

While supporters say the proposal is not site specific, there is little doubt the Mall of America is the preferred site. A schematic drawing prepared by Caesars shows what it thinks is a possibility: a 160,000-square-foot multi-story combination casino and hotel just north of the mall, with 5,000 slot machines and 150 gaming tables. Its exterior would be a postmodern combination of Romanesque columns and rotundas interspersed with gabled roofs and a porte-cochere and water garden.

The site would be developed, owned, operated and managed by Caesars in connection with a state authority created to license gambling activities.

A study widely circulated at the Capitol by the accounting firm Ernst & Young trumpets the benefits of the mall site, which annually generates more visitors than Las Vegas, New York City or Atlantic City.

"The location and demographics of the region, coupled with the extraordinary visitation statistics generated by the mall would allow this facility to not only compete with Native American casinos located throughout the State of Minnesota and surrounding jurisdictions, but would certainly grow the market and project it into becoming one of the significant gaming destinations in the country," the report concludes.

Bloomington-area legislators and the city's leadership oppose the idea of a casino next to the mall -- or at least they support the idea of letting Bloomington voters decide in a referendum. The site already has an approved project with a development contract in place for the next phase of construction at the mall. Bloomington officials say the city has spent more than $127 million in recent years providing infrastructure for developing property near the site.

But they recognize the influence that Caesars' money can bring and the difficulties they may face in opposing it.

"I think people in Bloomington need to know this will be money that will be exported out of Minnesota," said Rep. Ann Lenczewski, DFL-Bloomington. "But I certainly don't have the money to run a campaign to challenge them on what they claim. The resources at their disposal are enormous to make their case, whether what they say is true or not."

Caesars officials said the firm does not go where it is not wanted, but acknowledged that they are hoping to conduct an education effort to show the value of their proposal. They point to an estimated 5,200 construction jobs and more than 2,200 full-time jobs once the facility was built, numbers that could have building trades and service industry unions salivating in support.

"Our company has a long history of going to places where people want us to come," said Robert Stewart, vice president of communications for Caesars. "But the idea has to stand on its merits. We're talking about making the case with facts that are supportive. Our best prospect is to present the facts in a dispassionate way."

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